 Aloha everyone. Thank you for joining me on Think Tech Hawaii. I am Shonda Park, your host for Money Talk. I have Ken Hurley here on the show today. He is a regional sales director with One America and has been focused on the long-term care market for more than 35 years. He began his career in the insurance industry in 1984 and has worked with many companies across the West Coast. Ken is passionate about lending his many years of expertise and experience in long-term care planning. Welcome to the show Ken. Thank you Shonda. I appreciate you having me on today. I appreciate you being on. Go ahead. I was to say let me tell you a little about myself if I may. Yes please do. So as Shonda mentioned I've been in the long-term care industry for more than 35 years. It's something I'm very passionate about. I both my parents experience long-term care. I have had many friends and family members that have experienced some levels of long-term care in their lifetime. Actually one of my counterparts who is like a little sister to me she's going through it right now with her dad that has Alzheimer's and he's going on eight years and just had some health issues and went to the hospital about a week ago. They're preparing his house to be able to bring him home. So it's very fresh on my mind with one of my closest friends through work. So I'm very passionate about it. I also have some fun hobbies. I'm an off-road enthusiast. I go rock crawling in my Jeep in Northern California up in the Sierra Nevadas. So that's what I spend a lot of time doing. Also I spend a lot of time with my family. Let's rock crawling. Rock crawling. So it's going very slow over boulders that in some cases are size of cars or even bigger. And what's a lot of fun about it is there's places where you'll go where you don't see a road because there's really not a road. You're just going over the large rocks. I have a Rubicon which if you ever look at Jeep Wranglers you'll see there's a package called the Rubicon. It's because the trail the Rubicon Trail which is very famous in the off-road community is about four miles four sorry about four hours from my house. So I go there quite a bit with my son who's also an avid off-road person and I spend a lot of time with my two grandsons and my wife and love to travel. So I stay pretty busy. I'm rarely home. I like to be on the go-go-go. Sounds like a lot of fun. It is. And the rock crawling that sounds dangerous. It's really not that dangerous if you just pay attention. Our idea of fun is at three miles an hour. So we tend to go very slow but you have to to go over the rocks. You can't go fast. You have to go slow and really literally just crawl over the rocks. Nice and of course you have your long-term care in place right? Absolutely. Absolutely. I'm one of those guys that as some of my work friends have called me. I'm a long-term care geek or long-term care nerd. I have a handful of policies actually that I've bought over the years and for my wife and I. Good. Good. Always you know awesome to have all of that in place and you know multiple ones as well. Yes. I wanted to ask you what is the importance of November? Yes. November is very important in the world of long-term care for a couple reasons. One it's long-term care awareness month and that's a very important time for us in the long-term care industry to really do everything we can to get the word out and educate the consumers today about long-term care and more importantly long-term care planning. It's all about having a plan and we'll talk a little bit more about that. The other thing that's also important about November is the day the Monday following Thanksgiving is a special day as well in long-term care and what's special about it is that happens to be the busiest day of claims filed in the long-term care industry and the reason for that is what's going to happen Thanksgiving. Family gets together. We get together and for some folks they haven't seen a grandparent maybe since the prior Thanksgiving or Christmas time or maybe it's been a few years and especially this year coming out of the pandemic. We definitely haven't seen people like we normally have and so what happens is we're at grandma's house and we're having dinner and kind of notice that maybe grandma's not quite dressed like she normally is and maybe grandma's leaving the stove on and maybe there's some spoiled food in the fridge and we're just noticing some things that aren't the way we think of grandma and so what happens is on the Monday following Thanksgiving the phones are ringing off the hooks at every long-term care claims department because the family this is a family issue and so the family's picking up the phone and they're calling the claims department to say we need grandma needs some assistance and so Thanksgiving the Monday following Thanksgiving busiest day of the year the only reason it's not Friday is we like our Black Friday shopping just like everyone else so we're at the stores and we're closed on Friday but Monday our doors are back open and the phones are ringing off the hook and that's happened for as many years as I can remember because it really is a family issue yeah very true it is and I'm sure the phones are ringing off the hook on Friday however no one's there to answer yes so they're calling back on Monday right and you know statistically too that there is a second busiest day of the year too yes yeah the second busiest day of the year you know it's kind of follows that same theme of getting together with family and you know when I ask an audience what day they think that is most people say you know it's Christmas New Year and they'll go to Mother's Day and when I get to when I hear somebody say Mother's Day I say you're closed it's actually the Monday following Easter Sunday for the same reason you know Easter time family gets together it's spring break for a lot of kids or grandkids and so let's pack up the kids and go see grandma or aunts and uncles and that's when they see and experience the same thing as they did at Thanksgiving time and for many families that's the one time a year they get together is Easter for spring break and they see that grandma's not doing so well for grandpa or whomever that family member is but that's when they see it is because we get together again as a family so second busiest day being the Monday following Easter Sunday I see yes and like you said it is a family issue so what is the the question that is asked if you can bring up the first slide yeah so this is a really important question you know so many people think that it's never going to happen to them and and they're just not prepared so I like to ask this question and I've been asking it for 20 plus years of folks is you never you may never need care but if you did how would that affect your family and you know when we think about that it could affect the family very drastically the first one is the spouse you know for so many people they think well my spouse will take care of me and I don't have to worry about well it's not easy to take care of our spouse and think about how we might be taking care of a loved one when they're healthy today and we're young I'm 58 years old and you know my wife doesn't really need anything you know I cook dinner once in a while and you know do those things but I couldn't imagine having to take care of her when I'm 80 years old and she's 80 years old and that's when it becomes very difficult it's also tough on on the the children you know for so many children they'd have to you know taking care of a loved one means that it's hard on the marriage it's taking away from their family time with their kids the family dynamics is another thing that plays into it with so many families they don't get along when all of a sudden a parent needs care and so it can really test the siblings how well they get together and then there's the unnecessary losses and that can be both through work not being able to work and having to take time off or just other family commitments that you have not being able to take care of those so it's very difficult and the family losses can be tragic you know so many times I hear stories of people that they don't speak to their brothers and sisters anymore because they they had to take on the burden of taking care of a loved one a parent and why didn't my brother or sister's help whether it was physically or financially and they did all the work and they're saying you know why did I have to do it all and so now they're not speaking and so it tears families apart as well it's very tragic yeah I see that all the time as well yeah and what can families do about it yeah so it's really all about making a plan so you know there's a few things so some people say well I'm gonna I'm gonna look for you know how am I gonna pay for this well that's something they haven't really thought through and some people say well I'll let the government pay for it if you want to show the next slide so I'll let the government pay for it and the government paying for it means for most people Medicare pays such a small amount we really can't rely on the government's Medicare program it's designed for hospital stays and doctor visits so they say well what about the government's Medicaid program which is also welfare well in order to qualify for it you have to be poor how do you become poor well you have to spend everything you have to where you don't have any dollars remaining and then you qualify for the government's welfare program for long-term care a lot of people say well well what about traditional long-term care insurance then traditional long-term care insurance can be an answer for some people but one of the issues with traditional long-term care insurance is the prices can go up and and we do see rate increases on policies the underwriting can be more difficult for those type of long-term care policies and the last one that's a big one for so many consumers they say well what if I never use it just think of all that premium I spent and I didn't receive any benefit back we'll talk a little bit more about that in a few minutes and then last one is the people to say well I can pay for it out of my own pocket well paying for it out of your own pocket sounds great the reality is people run out of money pretty quickly and you know one of the things I like to remind people with there's so many people in the country that have second properties rental home you know maybe they rent apartments or they rent homes and they say you know if I ever need long-term care I'll just use one of my rental properties I'll sell that rental property to pay for my long-term care well then I I just simply asked that one question how would you feel about selling that rental property if it was 2008 all over again you know most people that own rental properties they were buying rental properties in 2008 and 2009 because they were on sale the last thing they wanted to do was sell a rental property and we don't get to pick and choose when we need long-term care for home care for facility care that's out of our control so we can't control when we might sell a property because of it right in the same sense right you can't pick that year either yeah right right so can you go to the cost of long-term care if you can bring up the next slide sure so the cost of long-term care you know has been going up a little over three percent per year and this has been true for the last 12 or 14 years so in 2009 right I'm sorry except for this year which this year it right they went up even more yes absolutely so the cost of long-term care is expensive and I want you to keep in mind so I live in the San Francisco Bay area I traveled to Wahoo quite a bit I was just there and met with Shonda but two weeks ago so I'm over your way quite a bit and and the one thing we have in common is the cost of living is more expensive than most parts of the country yeah and so the numbers that you're seeing these are actually national numbers so we know that they're even more expensive in the Bay area where I am yes and in a while so yeah so we're going to we know it's going to be even more expensive and if you look at 10 years from now long-term care could cost as much as $145,000 a year 20 years from now over $200,000 a year and keep in mind that's a national number that's not a that's not a number in Hawaii or in the San Francisco Bay area where I am that's a that's a national number so it's going to be even higher so let's go ahead to the next slide if we if you don't mind so people say well how long do people actually use long-term care well we can we can see that for males generally about two and a quarter years and if we look out 20 years from now with this national average that's over 400 almost $450,000 ladies about 3.7 years and the reason it's longer for ladies is quite frankly that most of the time we're gone so you know any care that we might have been able to provide you at home before you needed more home care or to a facility we've already passed on and we're not there for you because generally speaking the ladies outlive the men and then if we look at the big one you know Alzheimer's and dementia $1.6 million on average with an eight year of needing care and and this isn't eight years of being in a nursing home we're not talking about nursing homes or or assisted living we're just talking about long-term care in general and and something else I also want to mention is that you know people that re that purchase long-term care policies they receive care at home about 85% of all those who have long-term care insurance policies are able to stay at home so it's really all about staying home and you know eight years for an Alzheimer's patient is kind of the average and that's a long time but Alzheimer's doesn't kill us physically it kills us unfortunately up here but people are able to live for many many years with with Alzheimer's and and other forms of dementia so it can get very expensive and can last a long time yeah and they and like you said eight years is just the average right so in some situations it can be you know a lot longer yes which then lead to several millions not just seven you know you can get into two million and three million for for that type of care yeah yeah so a colleague of mine his wife was diagnosed in her mid-40s with multiple sclerosis and within just a matter of months she was in a wheelchair well here it is over 20 years later she's still going strong unfortunately wheelchair bound since shortly after the diagnosis and luckily they have lifetime long-term care coverage and it's it's really saved their family from going bankrupt and she's been able to get the care she needs and her kids were young when when it first started and and they were able to keep some semblance of a normal life with what she was going through so you just never know when it's going to happen and how long it could happen for that's a very young age yes be on long-term care claim in in her 40s yes yeah can you talk about that about the lifetime benefits sure so there's only two two companies that offer lifetime benefits uh our company one america is one of those companies and what's so nice about the lifetime benefits is you know most of the other policies and products for long-term care that are available have a limited period of time that they'll pay for with lifetime benefit it doesn't matter whether you need care for six months six years or 16 years it never runs out of care it will continue to pay for your long-term care services for as long as you will ever need long-term care and that's a really nice feature you know most consumers when you talk about long-term care they're not concerned about you know a few months or maybe even a year or two of long-term care even though it can be expensive you know for so many consumers they say you know i could i could probably pay for that what they're really concerned about is what if this lingers what if i linger and i need long-term care for a long period of time that could wipe out my life savings i could have to sell my home it could just you know everything i've worked for for a great retirement all of a sudden now it's all lost because i wasn't prepared for it and i needed care for many many years you know and and it can just destroy somebody's overall financial being just over it seems like overnight yes very true next slide please because when you talk about the average for the male and the female yes it may seem very low however you have those you know other type of cases like you're saying about your friend's wife you know it's a wonderful thing that she panned ahead and she has the lifetime benefits because having it in her 40s she may be a long-term care for over 20 years right right yeah you just never know so um you know speaking a little bit to this slide so there's lots of ways that people can fund a long-term care policy and and with this product this is what we call asset care uh lots of different ways to fund it and and the way these policies work the asset care policies work it's based on life insurance chassis and the the reason that's important is because no matter what i can promise every client that purchases one of these policies they will receive benefits for from the policy so we can pay one time and never have to write a check again there's a lot of people that like to just write one check and be done we can pay using qualified money so money from my ira my 401k those type of monies that we've put away we can use those dollars we also can pay over time you know not everyone has the ability to just write a check for a policy but they want to write a check a small check every year maybe it's over five years over 10 years over 20 years or paid to age 95 what's what's nice about these policies and we can go to the next slide if you don't mind what's nice about these policies and and here's where our lifetime coverage comes in is one way or another i can promise everyone that that has one of these policies they'll receive something from the policy so if we look at the the circle chart you see that we in most cases we're just using some conservative money we've got moderate investments we've got some aggressive investments then we have that that conservative money we just take a little bit of that conservative money out of the portfolio whether we're paying it one time or over five years or 10 years or to age 95 or using qualified funds but what i can promise every client is there's if you decide at some point to cancel the policy and we don't see many people doing it but from time to time people for whatever reason something changes they cancel the policy but they cancel the policy there's cash value so they get something back you wouldn't receive that in in a traditional long-term care policy the next one is there's a death benefit so if you never use the policy your family would receive a death benefit when you pass away and then of course there's the long-term care benefits and the beauty of this plan design in this particular scenario is the lifetime coverage so it doesn't matter whether i use it for six months six years 16 years there's always going to be a benefit available for the client to have that ever-ending bucket of money every month to pay for their long-term care services yeah that's very reassuring yeah let's go go ahead i'm very very unique about your company and when i heard that you're able to use qualified funds so you know for people who have their retirement savings in a 401k that you can actually roll over your 401k into this type of plan right in your asset care right yeah so if you can bring up the next slide yeah so this is a way that a lot of people like to buy our policy now we're not going to avoid the taxes you're still going to have to pay taxes because when you initially put the money into whether it was an IRA, 401k, whatever type of qualified account you didn't pay taxes on those dollars so you still have to pay taxes but what we do is we actually spread the tax burden out over a 10-year period of time so what we do is we in this example we're using a hundred thousand dollars and the hundred thousand dollars we move it into an IRA annuity and the reason we do that that's to keep it still as a qualified fund so you're not taxed on all of those dollars being moved day one we give it a 20 bonus so that hundred thousand just like that becomes a hundred and twenty thousand dollars and then for the next 10 years we're going to take a distribution every year for 10 years of twelve thousand dollars out of your IRA annuity and that pays for the policy now as I said a moment ago you still have to pay the taxes so how do you pay the taxes so every year for the next 10 years on that $12,000 withdrawal we will send you a 1099 and you'll need to pay taxes on the $12,000 and at the end of the 10 years we've used up all the qualified money and your policy is now paid up and you never owe any premium any longer what so many people like about this is you know there's a lot of people that have qualified money IRA 401k 403b and they put this money aside and they come to find out as they get into retirement they don't really need the money that they've got other sources coming in they're social security maybe they have a pension maybe they were just really good savers they paid their house off and they have all this qualified money that they don't need well the biggest risk that they faith as they get older is long-term care so it's a great way to use those dollars for your long-term care so a great approach that so many people like using qualified dollars the last thing I'll mention that we need to move on we're getting close on the clock is so it created a hundred and seventeen thousand dollar death benefit and on that hundred thousand dollars and it paid out over three thousand dollars a month for long-term care so here's just some of the ways that people use money to pay for it but the best thing is that it pays the policy off in 10 years so let's go ahead and keep moving if you don't mind I believe that's the last one okay yeah John any other questions that I can answer yes real quick can you use money from your health savings account for this and then also can you can it be paid from a s-corp and a c-corp yeah so for the health savings accounts there's two components to our policy there's what there's the life insurance component and then there's the extra long-term care which gives you that lifetime coverage and that second component what we call our continuation of benefit writer that's the piece that we can use money from an hsa and it is restricted there's what we refer to as age-based limits we have to look at depending on your age how much you can use from an hsa and then for business owners anything other than a c-corp you can deduct it from your federal income taxes once again the continuation of benefit writer and if you're a c-corp which there aren't a lot of c-corp if you're a c-corp that continuation of benefit writer 100% of it can be paid for by the business wow that's awesome thank you ken for being on the show today and sharing all of this wonderful information again one america being one of only two companies that offers lifetime benefits for long-term care thank you again ken and i will see everyone on the next episode thank you so much for watching think tech hawaii if you like what we do please like us and click the subscribe button on youtube and the follow button on vimeo you can also follow us on facebook instagram twitter and linkedin and donate to us at think.kawaii.com mahalo